Scoping Review on Financial Distress Prediction in India Using Modern Methods of Machine Learning

Abstract

Every business has its objective to attain, along with earning profits. A business needs finances and also throws up difficulties in meeting its financial requirements. If ignored, the challenges could affect the business. It is crucial for the business to keep a regular check, necessitating the right, analytical methods. A large number of works of literature have focussed on the traditional methods of predicting financial distress. Recently, a few studies evolved using modern methods. This study has a review of the literature regarding modern methods used in predicting financial distress. The present study has adopted the structure of a scoping review developed by Arksey and O'Malley and the main aim is to showcase the importance of predicting financial distress with modern methods through the machine learning approach. It also aims to highlight the drawbacks of statistical methods while predicting financial distress and covering the reasons for them.